Whats best for you?

Posted on Thursday 9th Jul 2015

VoIP (Voice over Internet Protocol): On-Premise, Hosted or Hybrid?

When choosing a new system there is a lot more to it when you strip back the Hype and Buzz words.

VoIP systems have been around for a lot longer than you’d imagine, but most in the industry would have taken note of VoIP PBX’s coming to market from the late 90’s onwards. These systems looked just like your old PBX but provided a more flexible deployment of handsets using the Category 5 structured cabling, same as your PC.

In the Rack space of a 30 extension system you could now have 100’s or 1000’s of extensions as no physical ports were needed on the PBX. Multi-site connectivity with free calling was possible and integration with multiple CRM services became possible without bespoke serial cables.

For many though you think of VoIP as a Hosted or Cloud service. These PBX’s sit in a data centre and provide you with services to a handset/softphone client that sits on your desk and is connected via the internet.


The decision to implement a VoIP solution leads to a perplexing choice: on-premise, hosted or hybrid? Each of these delivery methods has pros and cons most widely accepted, but some highly contested.

It really boils down to determining which type of solution is right for your company.


Key considerations should include:

·         Current/Future business needs

·         Number of users on a system, don’t forget remote/mobile workers and temporary staffing

·         Growth strategy and company goals (e.g. Growth, acquisitions, additional locations)

·         Security/redundancy/disaster planning/business continuity

·         Existing telecom assets (Handsets and PBX), telecom service contracts and network capacity

·         In-house expertise and resources to support the system deployed or maintained by a professional team

·         CapEx vs. OpEx


An assessment of these helps you gauge the functionality, capabilities, scalability, and flexibility needed to establish solution criteria.


On-Premise VoIP PBX

With an on-premise VoIP system, IP PBX equipment and IP phones are installed on-site and connected to your LAN. You own, administer and maintain all related equipment and software. Calls come to the system from a communications service provider over traditional PSTN (Public Switched Telephone Network) lines or over your BRI/PRI (ISDN) connections or SIP trunks and are distributed via the locale PBX to VoIP phones.


·         Greater control over your telecom investment - Ownership means an asset, all that hardware, software, devices, messages, records, etc. all remain on your company’s premises. You have tight control over updates and security, and with the system on-site can quickly address outages and issues.

·         Advanced Customisation - Applications, system specifications and configuration details can be tailored to your exact needs, which is difficult to achieve with most pre-packaged hosted solutions.

·         Total Cost of Ownership (TCO) - An on-premise solution requires a one-time capital outlay. After that, the only recurring costs are for maintenance and upgrades. Your service is managed internally. We see most customers with 50+ users taking up this kind of system.

·         Superior QoS (Quality of Service) - On-premise solutions run on your infrastructure. With a hosted solution, traffic runs on the provider’s WAN (Internet connection), which can compromise quality and reliability even on internal calls)

·         Network Convergence - Combine voice and data traffic on the same network to reduce network costs.

·         SIP Trunks – Virtual phone lines over the internet, this way you get some of the flexibility Hosted gives, but ensuring only traffic needing to go from your PBX hits the internet.


·         Substantial capital outlay – The initial costs for IP-PBX’s, servers, phones, software and maintenance contracts, etc, are significant. Given the inherent robustness of hosted offerings, many companies feel it is better to reserve capital spending for other projects.

·         Requires in-house resources to manage and maintain - Many organizations would rather focus their IT talent on other initiatives. Many IT staffs are limited and can become overburdened with maintenance/management tasks, which can delay upgrades, etc. Delayed upgrades can lead to operating on old versions that may no longer be supported by the manufacturer.

·         Limited flexibility and scalability - Routine activities like Moves/Adds/Changes (MAC), adding new system features, configuring remote users, scaling to handle growth or peak call volumes, etc. require IT resources and/or hardware/software upgrades to execute. With hosted solutions, many of these modifications can be done on-demand through web-based administration.

·         Time-to-solution - On-premise systems can require a lengthy implementation period, and the project is typically complex. Hosted solutions are more rapidly deployed as the core system is already built.

·         Total Cost of Ownership - Capital outlay aside, annual maintenance costs, additional licenses, hardware replacements and upgrades add-up over time. The company is also responsible for redundancy, downtime and power costs.

All said over a 10 year period many business favour the On-Premise VoIP solution


Hosted VoIP (facilities-based/cloud-based providers)

With a hosted VoIP solution, the service provider owns and manages most of the necessary infrastructure, equipment, software, etc. in their data center. In most cases, the company only needs to have a managed data service to the premise and any necessary racked switches and IP phones on the desk.

The Hosted VoIP service provides all of the features/capabilities of traditional phone systems and, frequently, many more. Services are accessed from anywhere via an Internet connection.


·         Minimal up-front costs and rapid deployment - With hosted VoIP, you are up-and-running quickly. Because it is delivered “as a service,” there is reduced capital outlay and investment risk. Monthly recurring charges (MRC’s) are subscription-based and come out of your operating budget. Subscription MRC’s are based on users, seats as well as call features.

·         Best-of-breed technologies and advanced features/capabilities - With a hosted solution, you are ensured access to the latest functionality. SMBs have access to enterprise-level capabilities. Adopting new features/functionality happens almost immediately as upgrades are “pushed” out to the customer premises - you bypass upgrade costs, delays and the need to involve in-house resources. Hosted VoIP easily integrates with unified communications.

·         Highly flexible and scalable - Web-based administration enables you to easily and rapidly make changes that would otherwise (with most on-premise) involve hardware/software upgrades, in-house IT resources, complexities and delays. You can manage MAC needs, add remote users, and optimize services/features/capacities/capabilities based on up-to-the-minute needs.

·         24/7 monitoring - With service providers monitoring around the clock, performance remains consistently high.

·         Redundancy/disaster recovery for voice and data - Most providers offer an embedded continuity plan that protects the integrity of your voice calls and messages.

·         Exiting the telecom management and maintenance business - Hosted VoIP eliminates a myriad of headaches, hassles, costs, and complexities that come with managing, maintaining and upgrading an on-premise solution. You bypass the added power expenses. Companies can focus IT resources on other strategic activities.

·         Network Convergence - Combine voice and data traffic on the same network to reduce network costs.


·         Total Cost of Ownership - Over time, recurring service charges add to operating budgets – diminishing the value of initial CapEx savings. Additionally, bandwidth upgrades could be required to adequately support services.

·         System improvements/upgrades are on the provider’s timetable – Although many modifications can be made to services through web-based administration, overall system improvements are out of your control.

·         Limited customization - Applications, system specifications and configuration details are largely determined by the provider in pre-packaged offers.

·         QoS and service interruption - Hosted VoIP calls are subject to quality problems if not set up correctly. Additionally, in the event of power outages and Internet down time, your system is down locally.

·         Loss of control - Letting go of telecom management can be a difficult adjustment, particularly for companies with concerns about records, voicemails, prompts, data, etc, residing on a provider’s external server.


Hybrid VoIP

So you want to move to SIP trunking and remote users, however you don’t want to push everything hosted, nor can you afford the CapEx model of the on-Premise system.

You have a system with 10’s or 100’s users, ISDN30 and all of your CRM has been bespoke created for you. Well there is a third option, Hybrid. Hybrid will allow you to have SIP trunks, remote workers and multi-site connectivity without replacing your system.

In most cases a VoIP gateway can be placed between the system and internet service provider. This gateway converts your digital signals to IP packets.

This is a very cost effective way for businesses with heavy investment help bridge the technology gap.


For further information or advice please feel free to contact us 01924 241260

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